Nickel prices surge as political riots erupt in New Caledonia

After months in the doldrums, the nickel price has made a major comeback following the eruption of political riots in the South Pacific nation of New Caledonia.

Within days of the riots’ scale hitting the headlines, the nickel price jumped by 5% to around $30,000 a tonne and has increased by a further 2.5% in recent days to its highest level in months.

Little wonder prices have taken off—the French-ruled nation is the world’s-fourth largest nickel producer with around 10% of global nickel reserves, approximately 7.1 million tonnes.

Production increase tipped

After a number of years of recent decline, the nation’s production – led by Eramet, Vale, Glencore and Sumitomo – had been tipped to rise by a compound annual growth rate of 2% between 2022 and 2026.

That forecast is looking dicey after locals clashed with local officials as a result of a constitutional amendment being passed to allow recent arrivals to the territory to vote in provincial elections.

Local leaders raised immediate concerns that the change would dilute the vote of the indigenous Kanak people.

Growing political turmoil

The threat of political turmoil on the island has been growing for decades with many concerned that the nickel riches were being sent overseas and not funnelled towards local needs.

Up to six deaths have already been related to the latest unrest, with local authorities quickly moving to shut the international airport and schools and impose a curfew in the capital Nouméa, where businesses and vehicles were set alight.

For its part the French government has vowed to crush the unrest and is adding significant numbers of gendarmes to its local force.

Australians evacuated

Australia has today received clearance for two Australian government-assisted departure flights to allow Australian and other tourists to depart New Caledonia.

Australia has also increased the level of its advice for New Caledonia to nationwide, in addition to the Nouméa metropolitan area.